The cost of capital (part 2) – ACCA (AFM) lectures
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Thank you so much Sir for the insightful lectures. Ive been exempted from FM and in my previous studies I’ve used a financial calculator to determine IRR. Please bear with me, I do have a somewhat ‘basic’ question in relation to the guesses I.e. the 10% and 15% range used per the tables in the example per the lecture.
Though I fully follow the thought process and principle of the calc. How do we decide which % to go based on the number of years?
Would be grateful if any other student also has an input on this please.
Thank you.
I think my query has been responded to in part 3 of the lectures by similar questions from other students. We use the spreadsheet method anyway in CBE. It would be good to know though.
Yes, you do use the spreadsheet formula (and this is all explained in the last chapter of the lecture notes).
Hello, Love the video I was wondering how you would use the IRR function in excel to get your answer instead?
Thanks for this. Is the answer to example 8 correct please? I don’t understand where 18.28 come from, I have it as 16.28? with the IRR coming out at 10.02%. The answer in the back of the notes also appears to multiply 6.06 & 10.22 rather than add them? Then the answer is 11.86. Bit confused. Thanks.
There is an error in the lecture – the total is 16.28 and not 18.28.
The printed answer is correct (the ‘x’ sign should be a ‘+’ sign but the workings are all correct.
Hi sir, I got the same answer as the student above (10.02%). I cannot seem to get the same answer in the lecture notes (11.86%). If the answer should add 6.06 and 10.22, should it be 6.06+(-10.22) = -4.16? but then the answer would be 2.7% . I’m experiencing confusion to get the final answer. Appreciate it if you could correct me, thanks!
Many congratulations on having passed 🙂
Thanks for a clear explanation! Passed FM with your lectures. Happy to know a lot while studying AFM now